Matt Turpin's China Articles - November 13, 2022
Friends,
I spent this past week in Brussels and Prague meeting with colleagues and conducting a few interviews. The policy debate over the PRC across Europe continues to progress towards a relationship defined by rivalry.
Next week President Biden and Xi are expected to meet in Bali on the sidelines of the G20 leaders’ summit. This meeting is neither a surprise, nor is it expected to result in any diplomatic breakthrough. The U.S. and the PRC share few common interests, and each are pursuing strategies to outcompete the other, while seeking to avoid direct military conflict. It serves both leaders well to be seen as meeting one another, but neither seem inclined to fundamentally alter the relationship.
Speaking of leaders’ meetings, Prime Minister Modi of India will also attend the G20 Summit, but he and Xi are not scheduled to meet with one another (as of a few days before the start of the G20). It has been three years since Xi and Modi spoke or met with each other, eventhough they both attended the SCO Summit in Uzbekistan in September. As the Indian China-watcher, Ananth Krishnan, recently pointed out: “At the SCO, not only did they [Xi and Modi] not hold a bilateral, they even didn't shake hands or make eye contact at group events, which made for somewhat awkward optics, especially as they were stood next to each other at the group photo op.”
Tensions caused by the border conflict between India and the PRC in the summer of 2020 are unresolved and the political instability in Pakistan (Beijing’s ally and Delhi’s adversary) must weigh heavily on both sides. As some Indian commentators have described it, the PRC and India are in a state of "no war, no peace” and “competitive coexistence.”
Thanks for reading!
Matt
MUST READ
1. How to Win the U.S.-China Economic War
Robert Atkinson, Foreign Policy, November 8, 2022
The U.S. national security establishment takes planning for military war seriously. It spends significant resources on war-gaming exercises and supporting the U.S. Defense Department. It has numerous war colleges to study combat. It enlists endless consultants to advise on every aspect of war. It employs historians to learn from prior conflicts. And it coordinates with agencies from across the federal government.
Such a system is largely absent for economic warfare. There is no planning. No assessment. No strategy. No economic security system. At best, there are individual programs and initiatives that fail to constitute a whole-of-government strategy or system. Absent an invasion of Taiwan, it seems there is no Chinese economic attack that could awaken Washington from its slumbers.
COMMENT – Rob Atkinson has been covering this topic for years as the President of the Information Technology and Innovation Foundation (ITIF). His January 2020 piece, Innovation Drag: China’s Economic Impact on Developed Nations is a must read too.
2. No nuclear weapons over Ukraine, Chinese President Xi Jinping says, in clear message to Russia
Jack Lau, South China Morning Post, November 4, 2022
Nuclear weapons must not be used over Ukraine, Chinese President Xi Jinping said on Friday, offering Beijing’s clearest response yet to Russia’s invasion of the former Soviet state, amid mounting concerns that the war might go nuclear.
“The international community should … jointly oppose the use or threats to use nuclear weapons, advocate that nuclear weapons must not be used and nuclear wars must not be fought, in order to prevent a nuclear crisis in Eurasia,” Xi said during a meeting in Beijing with German Chancellor Olaf Scholz, according to Chinese state news agency Xinhua.
Xinhua’s readout of the meeting did not target any country for criticism nor mention Russia.
COMMENT – Xi’s statement during a meeting with German Chancellor Scholz and reported by Xinhua, is an important diplomatic achievement. As far as I can tell, it marks the first time Xi has publicly re-iterated the statement that the P5 leaders made in January 2022, a few weeks before Putin began his illegal invasion of Ukraine.
On January 3, 2022, the PRC, the French Republic, the Russian Federation, the United Kingdom, and the United States affirmed “that a nuclear war cannot be won and must never be fought. As nuclear use would have far-reaching consequences, we also affirm that nuclear weapons—for as long as they continue to exist—should serve defensive purposes, deter aggression, and prevent war. We believe strongly that the further spread of such weapons must be prevented.” – (“Joint Statement of the Leaders of the Five Nuclear-Weapon States on Preventing Nuclear War and Avoiding Arms Races”)
Criticism of Chancellor Scholz’s trip is well-deserved, both because of its timing, coming days after the end of the 20th Party Congress, and by including German CEOs on the trip while excluding his fellow European leaders (undermining EU unity and the precedent set by President Macron). However, I think we should be grateful that Scholz, representing a non-nuclear weapons state, was able to achieve this diplomatic victory.
3. US warns Europe a conflict over Taiwan could cause global economic shock
Kathrin Hille and Demetri Sevastopulo, Financial Times, November 10, 2022
The US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific.
The state department has shared research with partners and allies that estimates that a Chinese blockade of Taiwan would spark $2.5tn in annual economic losses, according to six people familiar with the material, which was commissioned from the research firm Rhodium Group.
The stark warning has been shared with European Commission and European government officials, as the US and partners begin to think about how they could use sanctions against China over any military action against Taiwan. Washington is using the report to stress to European countries that a Taiwan conflict would have significant implications for them.
Two officials said the US and EU had begun talks about how to prepare for a possible conflict over Taiwan. The Financial Times earlier this year reported that the US had held contingency planning talks with the UK for the first time.
COMMENT – The team at Rhodium Group has been doing some impressive work over the last few years. Their estimate of $2.5 trillion is just the economic impact on day 1 of a PRC blockade of Taiwan and does not include any response by other countries or the impacts of likely escalation. Deterring Beijing from pursuing its dreams of Taiwanese annexation needs to be a global priority.
4. Strategic Ambiguity Out of Balance: Updating an Outdated Taiwan Policy
Yvonne Chiu, The Strategy Bridge, November 9, 2022
In September of 2022, for the fourth time in little over a year, U.S. President Biden said that Americans would defend Taiwan in the event of a Chinese invasion only to be followed by White House aides walking back his statement, because it contradicted an American strategy developed in the late 1970s of deliberate ambiguity about whether or not it would come to Taiwan’s aid if it were attacked. The most recent occasion prompted yet another round of questions about whether strategic ambiguity is dead and warnings that abandoning strategic ambiguity is unwise.
Many policymakers and analysts are concerned that Biden’s declarations of military support will dampen Taiwan’s incentives to reform its defenses or encourage Taiwan to declare formal independence and precipitate a Chinese invasion. There are certainly risks to abandoning a posture of strategic ambiguity but also many good reasons to do so, including that both Taiwan and China have taken unexpected paths that now moot the normative and geopolitical functions of strategic ambiguity.
In the 1970s, China’s Chinese Communist Party (CCP) deferred resolving the Taiwan question—invading Taiwan to defeat the Kuomintang (KMT) and claim that territory—because it prioritized achieving economic development that required access to and integration with international trade and capital markets. Meanwhile, the posture of strategic ambiguity taken by the U.S. sought to stabilize the Taiwan Strait with dual deterrence of both Chinese attack and Taiwanese declaration of independence. This policy rested on two premises—that China would remain committed to peaceful and non-coercive merger, if any, and that Taiwan’s independence was not essential to American foreign policy interests—neither of which holds today.
In the intervening years, China has decidedly not liberalized, democratized, or renounced the use of force to take Taiwan, and surveys of Taiwan’s population consistently show overwhelming preference for retaining the status quo—i.e., its de facto sovereignty—in the face of China’s domestic oppression (including its failed “One Country, Two Systems” attempt in Hong Kong), continued militarization, and increasing regional and cross-strait aggression.
THE CIRCUMSTANCES THAT SERVED AS THE PREMISE FOR STRATEGIC AMBIGUITY HAVE FUNDAMENTALLY CHANGED.
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Because both countries have changed in relevant ways in the past five decades, strategic ambiguity is already unbalanced. U.S. is calibrating its strategy against circumstances that no longer hold, and the two sides of the Taiwan Strait should no longer be equivalently deterred. China is now far more likely to invade Taiwan than Taiwan is to declare independence, and it is a miscalculation to dissuade them in equal parts.
For a liberal democracy like the U.S. that wants to stabilize a liberal global order, deterring an autocratic and expansionary China from invading Taiwan is both strategically and normatively essential, while deterring a liberal democratic Taiwan from declaring independence is not—and may even be detrimental. In the game of great power competition, it is common to overlook small states’ perspectives, but better accounting for not only China’s but also Taiwan’s domestic circumstances and world view would help correct strategic ambiguity’s outdated perspective and pave the way for a clearer Taiwan and Asia-Pacific strategy that is consistent with U.S.’ own long-term global interests.
COMMENT – It is worth reading Yvonne Chiu’s full article, she makes a good argument for revising our policies.
AUTHORITARIANISM
5. China ditches EU chief Michel’s speech at top trade show
Stuart Lau, Politico, November 8, 2022
Cancellation comes just a week before Michel is due to meet Chinese leader Xi Jinping.
Beijing canceled European Council President Charles Michel, after he planned to slam Russia's "illegal war" in a pre-recorded speech at a high-level trade expo in Shanghai last week.
The EU chief's speech at the China International Import Expo's opening was set to be heavily critical of "Russia’s illegal war against Ukraine" and say that Europe is learning "important lessons" from it, according to Reuters, which first reported the incident.
Michel is due to meet Chinese President Xi Jinping next week on the sidelines of the G20 summit, POLITICO reported earlier.
In response to a question about the trade show fiasco, Michel's spokesman confirmed the Reuters report: "President Michel was invited to address 5th Hongqiao Forum/CIIE in Shanghai. As requested by the Chinese authorities, we had indeed provided a pre-recorded message which was ultimately not shown. We have addressed this through the normal diplomatic channels.”
The expo also featured speeches made by Xi, managing director of the International Monetary Fund Kristalina Georgieva, director general of the World Trade Organization Ngozi Okonjo-Iweala and the presidents of Indonesia, Sri Lanka and Belarus.
6. Rich Chinese eye life abroad amid questions about policy direction under Xi Jinping
He Huifeng, South China Morning Post, November 9, 2022
Immigration consultants say anxiety is spreading among rich Chinese about their assets as President Xi Jinping starts his third term.
COMMENT – It is interesting to consider reports like this one that see an uptick in wealthy Chinese families seeking a visa and path to citizenship outside of the PRC… and what appears to be the opposite trend, according to an advocacy group called the Asian American Scholar Forum, that reports an outflow of Chinese scientists and researchers leaving the United States to return to the PRC.
I supposed both could be true, but suspect that the former is larger than the latter.
7. China wants to be a global talent hub, but what if they don’t want to come?
Luna Sun, South China Morning Post, November 8, 2022
8. China’s manufacturing hub Guangzhou partially locked down as Covid outbreak widens
Nectar Gan, CNN, November 9, 2022
9. Challenges lie ahead for Xi Jinping as economic slump grips China
The Print, November 11, 2022
10. How Xi Jinping is mobilising the masses to control themselves
The Economist, November 10, 2022
In 1963 Mao Zedong launched a campaign known as the “Four Clean-ups”, an attempt to rid China’s politics, economy, organisations and ideology of reactionary elements. Ordinary people were encouraged to name and shame anyone they deemed ideologically suspicious. Mao seemed particularly pleased with the small town of Fengqiao in the east. Around 900 of its 65,000 residents were called out by their neighbours in public “denunciation rallies”. The “Fengqiao model” demonstrated how the party could enlist people to solve problems at the local level, Mao said. The larger campaign resulted in tens of thousands of deaths and was a precursor to the horrors of the Cultural Revolution.
China’s current ruler, Xi Jinping, seems to share Mao’s taste for mobilising the masses to police one another (if not for the chaos and mass murder of the earlier effort). Mr Xi praises the Fengqiao model, which he has redefined as a way of empowering people. He talks of qunfang qunzhi, or “mass prevention and mass governance”. In reality he is using people to supplement the Communist Party’s other tools of control. It is a low-tech arm of a high-tech police state.
11. It’s Too Early to Celebrate Covid Zero’s End in China, Experts Say
Linda Lew, Bloomberg, November 11, 2022
12. Hong Kong court jails reporter for 3 months in first conviction over national anthem law
Brian Wong, South China Morning Post, November 10, 2022
Paula Leung, 42, waved colonial flag at APM mall during screening of star fencer Edgar Cheung’s gold medal ceremony last year.
13. Hong Kong journalist sentenced to prison for waving colonial flag during national anthem
Sharon Basch, Jurist, November 11, 2022
14. The Weakness Behind China’s Strong Façade
Bonny Lin and Joel Wuthnow, Foreign Affairs, November 10, 2022
ENVIRONMENTAL HARMS
15. Island nations want China, India to pay for climate damage
Valerie Volcovici, Reuters, November 8, 2022
Highly polluting emerging economies including China and India should pay into a climate compensation fund to help countries rebuild after climate change-driven disasters, the prime minister of island nation Antigua and Barbuda said on Tuesday.
The comments marked the first time the two nations have been lumped into the list of major emitters that island states say should be held to account for damage already being wrought by global warming.
FOREIGN INTERFERENCE AND COERCION
16. Lipavský demands Chinese explanation for “police stations” in Prague
Radio Prague International, November 12, 2022
The Czech foreign minister, Jan Lipavský, has called on China to explain the existence of two Chinese unofficial "police stations" in Prague, Deník N. reported on Saturday. The news site and the organisation Sinopsis revealed the presence of such Chinese “stations” last month and they are reportedly now being investigated by the Czech secret services and the Ministry of Foreign Ministry.
HUMAN RIGHTS AND RELIGIOUS PERSECUTION
17. Under Xi Jinping, Women in China Have Given Up Gains
Shen Lu, Wall Street Journal, November 9, 2022
Women’s labor-force participation has fallen since Xi took power, and China has dropped 33 places in a global gender-gap report.
In China’s state-media narrative, the Communist Party can pride itself on “historic achievements” on women’s causes during Xi Jinping’s tenure. By other measures, women have lost ground under Mr. Xi.
Since 2012, when Mr. Xi took power, there has been a drop in women’s labor-force participation, a crackdown on feminists and a new focus on women’s role in the family. China has dropped 33 places to the lower third in the World Economic Forum’s Global Gender Gap Report, to No. 102 in the 2022 ranking of more than 100 countries, down from No. 69 in 2012.
Perhaps the most high-profile setback came when the Communist Party last month unveiled top leaders for the next five years. For the first time in a quarter-century, there wasn’t a single woman on the Politburo—the two dozen most senior party officials in the country—either as a full member or as an alternate.
Over the party’s history, there have been only a handful of women on the Politburo and no woman on the Politburo Standing Committee, the pinnacle of power. Still, Yan Long, a political sociologist at the University of California, Berkeley, said the complete absence of women in the party top echelon symbolizes the end of “a hopeful era.”
18. U.S. blocks more than 1,000 solar shipments over Chinese slave labor concerns
Nichola Groom, Reuters, November 11, 2022
19. Beijing Lampstand Church: Families Demand Release of Arrested Pastor, Co-Worker
Tao Niu, Bitter Winter, November 11, 2022
Qin Sifeng and Su Minjun are in jail in Shandong after they tried to evangelize in Yunnan, a reminder of the “zero tolerance” policy for house churches who operate outside of their area.
20. Xi Jinping’s Third Term: A Uyghur View
Kok Bayraq, Bitter Winter, November 8, 2022
Can the Uyghur genocide be the main rationale for the extension? After all, Chinese say that you should not change horses while crossing a river.
INDUSTRIAL POLICIES AND ECONOMIC ESPIONAGE
21. Gap Sells Its China Business After 12 Years
Ben Otto and Dan Strumpf, Wall Street Journal, November 8, 2022
Like many Western retailers, the company hit snags navigating the changing and politically charged consumer landscape in China. In 2018, the company came under fire on Chinese social media for selling a T-shirt depicting a map of China without Taiwan, disputed islands in the South China Sea and parts of the semiautonomous regions of Tibet and Xinjiang. The company quickly apologized. China claims the self-governing island of Taiwan as an integral part of China.
22. 3 charged with sending defense-related data to China
Associated Press, November 10, 2022
Three people and a business have been charged in federal court with participating in an illegal scheme to export controlled data to China and to defraud the Defense Department.
An indictment was unsealed Wednesday in Kentucky after the arrest of the defendants. Phil Pascoe, 60, and Monica Pascoe, 45, both of Floyds Knobs, Indiana; Scott Tubbs, 59, of Georgetown, Kentucky; and Quadrant Magnetics LLC were charged with violations of the Arms Export Control Act, wire fraud, and smuggling, a statement from the Justice Department said.
The defendants are accused of illegally scheming to send defense-related technical data to a company in China and of unlawfully supplying the Defense Department with earth magnets from China for military items.
COMMENT – One more China Initiative case for the Biden Administration…
Martin Choi, South China Morning Post, November 11, 2022
24. Germany Blocks 2 Foreign Investment Deals, Taking a Firmer Line on China
Melissa Eddy, New York Times, November 9, 2022
The government of Chancellor Olaf Scholz blocked the sale of a semiconductor company to a Chinese-owned firm on Wednesday, as Germany seeks to toughen protection of its domestic technology and ease its dependence on China.
Robert Habeck, Germany’s economy minister, said the government had also blocked a separate investment in a German company producing critical infrastructure, which he said could not be identified because of secrecy agreements.
CYBER AND INFORMATION TECHNOLOGY
25. Microsoft helped build AI in China. Chinese AI helped build Microsoft.
Kate Kaye, Protocol, November 2, 2022
Despite the lab’s historic role bridging AI research discoveries between China and the rest of the world, these days Microsoft is not eager to broadcast it. Following several months of requests for interviews, the company would only agree to provide written email responses to Protocol.
Part of the reason for its reticence might be that the company’s expanding business in China has become increasingly sensitive in the U.S. Even when Microsoft announced plans in September to grow operations in China to coincide with its 30th anniversary in the country, the company did not publicize the news in English-language media.
“In celebration of Microsoft’s 30-year presence in China, the local team shared the company is on track to reach 10,000 employees in China — a 10% growth target disclosed more than four years ago,” a Microsoft spokesperson told Protocol, noting that the company is “very close” to hitting that 10,000 employee goal.
26. China’s Digital Yuan Works Just Like Cash—With Added Surveillance
Jennifer Conrad, Wired, November 8, 2022
Government officials are urging citizens to adopt the official digital currency in a bid to gain more control over the economy.
MILITARY AND SECURITY THREATS
27. Xi Jinping tells Chinese military to boost troop training, war preparedness
Ananth Krishman, The Hindu, November 9, 2022
28. China’s security increasingly unstable, uncertain – China’s Xi
The Print, November 8, 2022
29. The Ebb and Flow of Beijing’s South China Sea Militia
Asia Maritime Transparency Initiative, November 9, 2022
Analysis of satellite imagery from the past year shows that hundreds of Chinese militia vessels continue to operate in the Spratly Islands on a daily basis. The data confirms the massive scale of militia force in the Spratlys. It also shows a marked consistency in their movement and behavior patterns despite outcries from other claimants: militia continue to mass around Whitsun and Hughes reefs in Union Banks and maintain a persistent presence at other key features, such as Philippine-occupied Thitu Island.
30. No war no peace in PP15 but China wants more in Depsang Plains, Charding-Ninglung Nala
Lt General (Ret) H. S. Panag, The Print, September 15, 2022
31. China offers ‘friendly countries’ radar system that can detect enemy satellites
Liu Zhen, South China Morning Post, November 11, 2022
32. What has changed between China and Taiwan?
Scott L. Kastner, Washington Post, November 10, 2022
ONE BELT, ONE ROAD STRATEGY
Nadya Yeh, The China Project, November 10, 2022
A deal with the government of Angola could give Chinese-owned mines in Congo a railway to the Atlantic, but elsewhere in Africa, wariness about China-funded projects is growing.
34. Colombia’s Relationship with the PRC
Evan Ellis, CSIS, November 10, 2022
From October 6 to 16, the author traveled throughout Colombia to speak with businesspeople, academics, and other professionals about the country’s security panorama, its commercial and other relationships with the People’s Republic of China (PRC), and prospects for evolving those relationships under the new government of Gustavo Petro. This white paper, the first of two on those interactions, addresses the country’s important and deepening relationship with the PRC and its companies.
OPINION PIECES
Kevin Rudd, Foreign Affairs, November 9, 2022
36. From one China to greater China
Lt General (Ret) P.R. Shankar, Taipei Times, November 10, 2022
In a message posted on Twitter on On Oct. 6, Chinese embassy in India spokesperson Wang Xiaojian (王小劍) urged New Delhi to adhere to the “one China” principle and stop all forms of official exchange with Taiwan. This needs to be put into the correct perspective.
The “one China” principle is a core issue the People’s Republic of China (PRC) uses to lay claim to Taiwan. By extension, this principle is used to give legitimacy to all areas it has usurped and all other territories it now lays claim to.
This corrosive principle underscores China’s hegemonistic ambitions and territorial expansionism.
However, the “one China” principle is based on false premises and a deceitful distortion of history. The PRC uses similar distorted logic to advance its claims in other areas.
In this context, one must go back to ancient Chinese history — which is staring at us from the Great Wall of China — to understand what the real “one China” is.
The Great Wall of China was built by various empires to prevent invasion by other states, secure China’s northern border and protect the Silk Road trade. However, there is no single wall.
The Great Wall, as we know it, is a series of walls built over centuries of Chinese history by emperors of different dynasties and for different purposes. The outer boundary of the Chinese nation is defined by the outermost part of the “great walls.” From this fundamental logic it is quite clear that there is only “one China” — the area encompassed by the Great Wall to the north and the coastline to the south.
The areas of Tibet, Xinjiang and Taiwan are well outside this area, based on historical evidence. As late as 1932, Tibet, Xinjiang, Manchuria, Mongolia and Taiwan were not part of China.
Xinjiang, Manchuria and Mongolia were assimilated into China by the communists using various pretexts during a politically turbulent period in China which spans the Japanese occupation and the civil war up to the end of World War II. Tibet was invaded and annexed in 1956.
In the 17th century, Taiwan was a Dutch colony. After a brief period of independence, it was taken over by imperial China. It was a Japanese colony from 1895 to 1952.
Japan ceded sovereignty over Taiwan as per the Treaty of San Francisco and Treaty of Taipei on April 28, 1952, to the Republic of China (ROC) — not to the PRC, governed at that point by the Chinese Communist Party (CCP). Ever since then, Taiwan has been an independent state. It has never been ruled by the CCP, even for a day.
In the mid 1970s, many governments did not recognize the PRC, while most governments recognized and dealt with the ROC. It was only when the US recognized the PRC in 1979 that the very idea and concept of the “one China” principle came into being.
China insists that Taiwan is an inalienable breakaway part of its territory, and wants to annex it, by force if necessary. This was one of the key themes at the CCP’s 20th National Congress. From all perspectives, the “one China” principle is a recent construct and is not based on historical evidence.
The “one China” principle is therefore premised on the false fact that Taiwan is part of the PRC, even though it has never been under its rule. Accepting this outlandish principle and its twisted logic means accepting the Chinese expansionist claims in other areas.
For instance, China twisted and manufactured history in the form of the “nine-dash line” to lay claim to the entire South China Sea. Ignoring Chinese intentions and not contesting its falsehoods emboldened the PRC to establish artificial islands in the South China Sea and control part of it.
From an Indian perspective, the twisted Chinese logic of “one China” resonates with other perfidious claims. In a 2003 agreement, India recognized Tibet as part of China. The agreement was based on the understanding that the boundary between India and China was to be settled generally along the McMahon Line, in itself based on the Himalayan crest line.
At the time of the signing of the agreement, Arunachal Pradesh was already one of the constitutional states of India, as it has been since 1987. There was no objection to this status when the agreement was signed in 2003.
However, after signing it, China started laying claim to the entire state of Arunachal Pradesh, saying it is part of South Tibet. Until then, the term “South Tibet” had never existed in any form. The invented term is now being given a coating of fictitious history to accord it legitimacy.
There is a stark similarity with this process and the one behind the idea of the “one China” principle.
In its latest gambit in 2020, China laid claim to the Sakteng sanctuary, which is 100km deep into Bhutan. This area is contiguous to the Tawang Tract. The Chinese have now started claiming it as part of South Tibet.
The Chinese have simultaneously revived Mao Zedong’s (毛澤東) so-called “palm and five fingers” theory, which says that Xizang (Tibet) is China’s right hand’s palm, and its five fingers are Ladakh, Nepal, Sikkim, Bhutan and Arunachal. As all of these five are either occupied by, or under the influence of India, it is China’s responsibility to “liberate” the five to be rejoined with Tibet.
The concepts of “one China,” the “nine-dash line,” “South Tibet” and “Mao’s five fingers” are all part of China’s territorial expansionist design, which is being furthered and implemented incrementally. There seems to be a “Greater China” principle at play. It is high time that India and the rest of the world recognize that accepting the “one China” principle means yielding to China’s larger plan.
From an Indian perspective, it is totally unacceptable. This needs to be conveyed in no uncertain terms. I do hope that Wang reads this. I also hope that some officials in the foreign ministries of India and Taiwan read this and formulate a joint plan to counter China’s illegal expansionist designs.
37. China’s Coming Clash with Economic Reality
Jim O’Neill, Project Syndicate, October 24, 2022
Judging by the reporting from the Communist Party of China’s 20th National Congress, Xi Jinping, newly anointed to an unprecedented third term as president, is tightening his political grip and strengthening the CPC’s control over society. Can successful economic development continue in this environment?
I have been thinking for many months now that one day, I would wake up to read that China was revisiting its zero-COVID strategy, overhauling the CPC’s interaction with domestic private business, truly reforming the country’s hukou system of residence permits, and rethinking crucial aspects of its Belt and Road Initiative (BRI) and its recent tactical stance on international governance. It is proving to be a very long wait.
At a meeting with a senior Chinese official a few months ago, I jokingly said that my 30-plus years of “understanding” China may have been a fluke, because I couldn’t comprehend some policies the country had adopted in recent years. The only way I could rationalize them was to conclude that they must be part of some tactical maneuver to neutralize factions within the CPC’s upper echelons ahead of the Congress. Judging by who the Congress has chosen to be next to Xi in the new leadership, there have certainly been further purges of opponents – and very few signs of a reversal of the policies of recent years.
38. Why Japan Is Gearing Up for Possible War with China
Hal Brands, Bloomberg, November 6, 2022
The threat of Chinese aggression is producing a quiet revolution in Tokyo’s statecraft — and officials are pushing the nation to get ready for a fight.
Stephen S. Roach, Project Syndicate, October 24, 2022
China’s 20th Party Congress has come and gone. Despite all the fanfare and media hype, it was a hollow event. It revealed little we didn’t already know about China – an autocracy that maintains grandiose ambitions and ideological bluster to match, but is woefully unprepared for an uncertain future filled with risks largely of its own making. That much is evident when the results of the Congress are examined from three perspectives: leadership, strategy, and conflict.
40. Is China stuck in second place?
Dexter Tiff Roberts, The China Project, October 7, 2022
This was supposed to be China’s century, but the country may never surpass the U.S. as the world’s largest economy, argues veteran China business reporter Dexter Tiff Roberts in the latest installment of his weekly column for The China Project.
Remember all those investment banks and research institutions predicting China would surpass the U.S. with the world’s largest economy? Goldman Sachs, for example, 15 years ago said it would happen in 2026. And last year Nomura predicted China would take the lead in 2028, while JPMorgan put it by 2031 at the latest. For years it has been assumed a done deal with the question only being when.
Well, it may not happen quite so fast or some say, ever. The combination of a badly slumping economy, which grew only 0.4% in the second quarter over a year earlier, plus the rapid depreciation of the Chinese yuan against the dollar — down more than 10% so far this year — makes China assuming the global pole position now look a lot further off.
41. Will China Prove the Doomsayers Wrong?
Minxin Pei, Project Syndicate, November 8, 2022
Investors seem convinced that Chinese President Xi Jinping’s new leadership lacks the knowhow and independence to mount an effective response to the profound economic challenges the country faces. Whether they are proved right or wrong depends – like virtually everything else in China nowadays – on the man at the top.
Thomas Friedman, New York Times, November 1, 2022
43. China’s Diminishing Returns
Kenneth Rogoff, Project Syndicate, October 31, 2022
Gone are the days when China could point to soaring real-estate prices and rising incomes to justify endless new construction. China’s economic slowdown suggests that housing and office prices are headed for a steep fall that could take down banks and local governments, leading to prolonged stagnation.